|The jet engines of the Gulf stream II were revving as the $5-million aircraft sat on the cold pavement at Burke Lakefront Airport awaiting its passenger. Up the ladder bounded a six-foot-three, white-haired man in a khaki Burberry raincoat and a brown suit. |
Richard E. Jacobs, new owner of the Cleveland Indians and one of the richest men in Cleveland, the United States, and the world, climbed aboard.
Jacobs had driven his gargantuan 1976 Cadillac convertible to Burke to make a routine trip to New York. In the space of 24 hours, he planned to check on the $5-million renovation of his exquisite midtown Manhattan townhouse, meet with his New York corporate representative, huddle with baseball commissioner Peter Ueberroth, and take an art-buying excursion through the city’s most exclusive galleries with advisers from Citibank, the world’s largest bank.
As the Gulfstream roared down the runway, Jacobs, a man of quick, almost self-deprecating wit, settled into one of the plush seats and removed his enormous black loafers.
“They’re size 14. Now you know why I take them off,” he said with a grin. “Actually, they’re for helping me walk on water.”
After inviting a guest to sample a snack tray, Jacobs closed his eyes for a few moments of peace. In less than an hour, the plane — painted with brown and orange pinstriping, the official colors of Jacobs’s company — touched down at Teterboro, the northern New Jersey airport.
“I drive my own car in Cleveland,” said Jacobs, piling into the back seat of a gray stretch limousine waiting at the foot of the steps. “But in New York, there’s no other way to get around.”
For Dick Jacobs, this jet-setting schedule is a way of life. And no wonder. Jacobs, 61, is one of America’s most dynamic entrepreneurs.
He is considered one of the largest shopping-center developers in the country and is the new owner of the Indians, a sports franchise that could be on the verge of greatness. Still, he is uncomfortable with media attention and is not well known outside of business circles — even in Cleveland.
Jacobs has avoided reporters since taking over the Indians late last year for what is pocket change for him — $35 million and another $6 million in deferred compensation. After weeks of discussion, however, he consented to a series of interviews here and in New York with Cleveland Magazine. Throughout the talks, he expressed concern over the media’s portrayal of his role in the community.
Jacobs made it clear that he neither seeks publicity nor cares for it. He acknowledged that by purchasing the Indians he has had to go public — but reluctantly. In short, he is one baseball owner who will enjoy talking to the fans far more than to the media.
Perhaps his desire for privacy is why he so often goes to New York, where over the last two years he has supervised the roof-to-basement remodeling of the four-story, 120-year-old townhouse that he also uses as an office. Jacobs is developing a taste for art and has purchased millions of dollars’ worth of antique furniture, sculpture, and paintings — mostly Old Masters and the works of 19th-century European artists — to complement the 18th-century London townhouse decor. One of his most interesting acquisitions is a massive sundial in bronze by American sculptor Georg Lober. It dominates the patio garden behind the townhouse.
Among the 50 paintings, sketches, and prints in the townhouse are notable oils by Lanfranco and Canaletto and a watercolor seascape by J.M.W. Turner. On our trip to New York, Jacobs visited three galleries on the upper East Side by limousine for a showing of traditional and contemporary works — some valued at more than $500,000. Accompanying him were three Citibank advisers who are also helping with purchases for Jacobs’s condominium and offices in Cleveland.
“He’s becoming one of the great American collectors,” Citibank art advisor Jeffrey Deitch says. “He collects like a museum, getting really superb examples of artists who made significant contributions. He’s also given himself a remarkable education in art history. He has astute judgment and very good instincts.”
As much as he is eager to invest in expensive art and rub elbows with the art world, Jacobs still has a common touch. Often in the evening, he strolls across the street from his townhouse to the archway of a large office building to talk to homeless people who sleep there regularly.
If anything, it is Jacobs’s straight talk — whether with a bag person or an art connoisseur — that impressed owners of the other major-league teams.
“They were pleased but at the same time wondered why an obviously successful businessman would make such a major investment in Cleveland baseball,” says Peter Ueberroth, sitting in his Park Avenue office. “Jacobs’s agenda became clear early on. He cares dearly about his community and did not want to see the team leave. We see him as a no-nonsense guy, and baseball needs that.
“Approving a new owner is a cumbersome and difficult process,” Ueberroth adds. “But he had the unanimous support of other team owners, which is rare. The reaction in the ownership meeting in December was excellent. He was direct, matter-of-fact. He seemed to know it would be a difficult road ahead, because baseball has not been profitable for a long time in Cleveland. He talked about his caring for the game and his willingness to learn about it.
“He appears to have an intellectual capacity that is remarkable. He doesn’t skip over details. When you can have that, along with an owner who lives in the community, it’s the best assurance there is for a team. Contracts that force a team to stay in a city always work to the negative.”
Jacobs, along with his older brother, Dave, is probably worth more than a half billion dollars, though Forbes magazine, in its annual survey on the 400 wealthiest people in America, has not yet discovered them. Both avoid any discussion of their fortune or persona] lives.
Dick says his career has been built on one negotiation after another, and that he does not allow adversity to stop him. “We’re not pushovers in any sense of the word, but I respect the dignity of the other fellow. I may not be able to make a deal, but I want to go away without any hard feelings.”
In fact, the Jacobs brothers bought the team from the estate of Francis (Steve) O’Neill and some 65 minor investors only after numerous other potential buyers failed to meet the requirements of team chairman Pat O’Neill.
This spring, Dick Jacobs, whose motto is, “Let’s deal,” will embark on the quixotic endeavor that puts him in the city’s celebrity elite; leading the eager young Indians to a pennant.
His ascendancy could not be more timely. The Indians are hot. Last year, they galvanized the town with their exciting play and lineup of young stars. Under a new management team headed by Peter Bavasi, the team finished with its best record since 1968. Winning 84 games with 78 losses, they were 11 and a half games out of first place, but only six behind the archrival New York Yankees.
The team also drew 1.5 million in attendance, its best mark since 1959, and earned a paper profit of about $100,000 — meager, perhaps, but the first black ink in three decades.
This winter, Bavasi surprised most of Cleveland by resigning after only two years here to head Tolerate Sports, part of Telerate, Inc., a huge financial-information system in Scarsdale, New York.
“The change certainly wasn’t planned,” allows Bavasi, “but I couldn’t turn down the offer. The team will do very well under Dick. He’s more than honorable, and his success speaks for itself.”
Speaking to the office staff after Bavasi’s sudden announcement, Jacobs said that the team’s rebuilding plan
“It came as a complete surprise to me,” says Jacobs. “I was hoping he would stay with the organization. But I understand his leaving because of the opportunity.”
“Dick’s smile may be engaging.” observes a friend, “but he can have ice water in his veins. Make no mistake — he won’t be out front on the Indians, but he will be in charge.”
Though Jacobs is reluctant to talk about himself, he will soon be facing a new world that calls for dealing with the public. He will probably adapt, but newspapermen looking for controversial statements and television reporters scraping for crisp sound bites will be disappointed. Even in a lengthy conversation, he is guarded.
He is noncommittal on the proposed domed stadium but agrees with American League President Dr. Bobby Brown that, all things considered, baseball is better played in an outdoor stadium on real grass, not artificial turf. In any case, it would be easier to get his support for a dome with natural turf and a retractable roof...and, of course, favorable lease terms. “It would be premature for me to get involved in this now,” Jacobs says.
Still, Jacobs never takes off his salesman’s hat, and through the winter he personally sold season tickets to business associates and friends — anyone he could corral.
“It was bandied about for so long that the Indians were so bad that they would have to leave town,” Jacobs says. “It was becoming a self-fulfilling prophecy. I wanted to provide the team with reasonable financial stability and keep it here.
“I’m selfishly altruistic,” he adds. “I wanted to do something for the town and have fun at the same time. I have the inquisitiveness to be in a new business. It’s another chapter in my book of life.”
The Jacobs brothers have also written another chapter by leaping into the downtown building gold rush. A year ago, they bought the 40-floor Erieview Tower — the “Jolly Green Giant” — for $43 million and have set out to build what promises to be the most exciting new upscale retail-shopping complex
in Greater Cleveland — the $45-million Galleria — over the adjacent plaza and fountains on East 9th Street. When completed in the fall, this new glass-enclosed mall will have 70 exclusive shops and services and a large food court. It will compete with Beachwood Place mall.
The Jacobses have a reputation for going first class, and their downtown projects are no exception. They are also planning two new office buildings on East 12th and St. Clair in Erieview — one 20 floors high and the other up to 40 floors — designed by world-famous architect Philip Johnson, a native Clevelander who designed the new Cleveland Play House.
The buildings, one to cost $60 million, the other from $75 to $100 million, will be attached to parking garages for 1,200 cars and connected by skywalks. This development, scheduled for completion in 1992, is favored by city officials over competing proposals.
It still requires City Council approval, because the Jacobses must purchase the property from the city. If the project succeeds, the Jacobses would then like to develop apartments between Lakeside Avenue and the bluff leading to the railroad tracks.
Last fall, Dick Jacobs met with Mayor George Voinovich and impressed members of the planning commission and City Council with his Erieview proposals. He invited Council President George Forbes to his office and to lunch.
“We were fascinated with the Jacobses’ Galleria presentation,” says Voinovich. “They back up their commitments. Their purchase of the Indians was done without fanfare, without asking for anything. I’m pushing corporations to buy Indians tickets this year.
“Other businessmen should get to know the Jacobs brothers,” the mayor adds. “They’re blue-chip. Their commitment to the city is a great boon. It will lead other developers to think about the potential here.”
Whatever they build, it appears that the Jacobses are already succeeding where others with more talk and less money have failed. They are remaking parts of Cleveland that have lain fallow for years — from major-league baseball to Erieview development.
“Cleveland’s on the upswing,” says Dick Jacobs, who is chairman, CEO, and driving force behind Jacobs, Visconsi, Jacobs & Company (JVJ), and the new Indians chief. “And we want to be part
Jacobs can be part of anything he wants. Among JVJ’s holdings are 38 shopping centers in 16 states, from Washington to New Jersey, and Wisconsin to Florida. Dick and his brother also manage another four, including the Euclid Square Mall. In Northeastern Ohio, they own the Westgate, Midway, and Belden Village malls.
In addition, the Jacobses own 25 Wendy’s franchises in metropolitan New York. Under their contract with Wendy’s, they have the exclusive right to build 150 more outlets in New York.
They have scores of other ventures, including a partnership in Marriott hotels in Beachwood, Buffalo, South Bend, and Columbus. They also own part of the popular Pier House hotel in Key West, Florida, and 40 townhouses in Fort Lauderdale. Just recently, they sold a chain of 50 greeting-card stores, Cards 'n’ Such, to Cleveland-based American Greetings.
Dick Jacobs does not carry a business card. “If the deal is good enough, I’ll be found,” he says. He holds to a rigid, old-fashioned business philosophy that he guarantees will reap rewards if practiced. “An entrepreneur’s traits should include honesty, integrity, persistence, a high degree of competitiveness, resiliency, flexibility, industriousness, and vitality.
“You must select your niche in life — a chosen field. Then be the best that your abilities enable you to ascend to. Arnold Palmer once told a partner in a Pro-Am tournament who was carelessly swinging at the ball, ‘For God’s sake, aim at something.’ “Jacobs has hit the bull’s-eye. JVJ is the fourth largest shopping-center developer in nation, with 3,900 tenants and nearly 40 million square feet built and/or managed. Only Edward DeBartolo of Youngstown, Melvin Simon of Indianapolis, and The Rouse Company of Columbia, Maryland, are larger.
Headquartered in a sweeping granite building at the corner of Columbia and Center Ridge roads in Westlake, JVJ is a far-flung network of 2,000 employees nationwide, all of whom are called “associates.”
“I don’t believe in the word ‘employee,’ “ says Dick Jacobs. “We are like a family. We have very little turnover. People are rewarded in proportion to their productive efforts. If they do well, I do well. It’s that simple.”
JVJ serves as the umbrella under which the many ventures — each structured as a separate partnership or corporation — are controlled. The Jacobs brothers are partners on most deals, but they afford a dozen executives the chance to own small pieces of selected ventures.
So low-key are the brothers that operators answer the telephone only with “4800,” the suffix of the phone number. The four-story building, erected in 1971 and expanded in 1986, has no sign in front — only an understated JVJ logo etched into a black granite slab along with the street address. The same address, 25425, is painted on the tail of the company jet.
The company headquarters are quietly elegant. The foyer resembles a small version of the new TRW headquarters in Lyndhurst, with an atrium, marble floor, and central reception desk. Business meetings are often conducted in a large parlor with a working fireplace. Redecoration plans call for tasteful, expensive original art to be hung throughout the building.
While the brothers are inseparable and have offices near each other, Dick is the more aggressive of the pair, the Mr. Outside who fashions all the deals. He is also majority partner. Dave serves as chairman and CEO of the Jacobs Brothers Company, the construction arm of JVJ. Cleveland developer Dominic Visconsi is a partner with the brothers in 15 shopping centers.
In recent years Visconsi has sold some holdings to the Jacobses while pursuing separate projects with his sons. Visconsi keeps an office at JVJ, another downtown, another on Chagrin Boulevard, an apartment in New York, and homes in Beverly Hills and Palm Beach.
Visconsi is not involved in the Indians deal. Dick Jacobs owns nearly 75 percent of the team, while Dave has 25 percent, and Martin J. Cleary, JVJ president and chief operating officer, has a fraction of one percent. It is Dick, however, who made the final decision to buy the Indians and who alone will run the team.
Dick’s son is 33-year-old Jeff Jacobs, a former Republican state representative who spent over a million dollars on television advertising in his unsuccessful campaign for state treasurer last year. Independent of his father, Jeff is developing the Nautica mixed-use waterfront project in the Flats.
“We’re both Type A people, quick to express our own opinions,” says Jeff, explaining his decision not to join JVJ. “Development’s in the blood, but because so many families lose the entrepreneurial spirit in the second generation, we both felt it would be best if I went on my own, perhaps got kicked around a bit.”
Dick Jacobs, too, has struggled, but he does not offer many details. He does not talk about his contributions to Republican causes or his private philanthropy. Even getting him to sit down for this article required painstaking negotiations, far more demanding for him, it often seemed, than negotiating for the $60-million, 1.1-million-square-foot Galleria Shopping Center in Fort Lauderdale. ‘.He bought this enormous shopping center at about the same time he agreed to interviews with Cleveland Magazine, the first he has granted outside of trade publications. “Make sure you point out that you sought this interview,” he repeated.
Dick is such a consummate dealmaker that he takes little time for relaxation other than occasional trips to his condominium in the Florida Keys or a cocktail-hour vodka at Sammy’s in the Flats. Even a party is rare, though two summers ago, Dave Jacobs hosted a 60th-birthday stag party for his younger brother on a chartered yacht. The 50 or so guests — old high-school chums as well as business associates — set out from the Cleveland Yachting Club and drank champagne as the ship cruised to Jim’s Steak House for dinner.
While he is a man of sharp contrasts, Dick Jacobs does most everything with style in his professional as well as his personal life. He does have an interest in collecting art treasures and antiques, but he eschews pretension. “If you met Dick for the first time,” says a friend of the brothers, “you wouldn’t know he had a quarter.”
Hardly ranking members of the East Side business establishment, the Jacobses live on the West Side. Dave and
Barbara Jacobs have a large home in Bay Village and are active in charitable and religious activities, including the Bay United Methodist Church.
Dick, who is divorced, lives in Winton Place on the Lakewood Gold Coast. He is staying in a small condominium there while a million-dollar remodeling job is done on his two-floor penthouse suite, which affords a panoramic view of Lake Erie.
In enclosing the balconies and expanding the floor space on three sides of the building, enormous windows had to be flown in by helicopter. The marble floors are joined by a winding staircase and private elevator. As with his New York townhouse, the Winton Place suite will be filled with art and antiques.
Dick Jacobs is a man of contrasts. He belongs to the Union Club and the Westwood Country Club and drives the 1976 Cadillac when not in the four-door 1979 Lincoln that he had customized into a convertible. He carries a $28 Land’s End briefcase and pays scant attention to current fashion — his taste is expensive but resembles the 1950s look. His dress shirts have French cuffs, and he wears custom-made gold cufflinks, a gift from his sister-in-law, bearing an etching of the Cleveland Indians’ Chief Wahoo.
Jacobs’s secretary, Charia, types his daily schedule on the file card that he keeps in his coat pocket. He sleeps with a lighted pen on a table so he can jot down ideas in the middle of the night.
Apart from Cleveland, New York is his favorite city. He commutes there an average of once a week in the company jet. The Gulfstream His kept at Hopkins and flown by a full-time crew. Since the plane is in constant use by Jacobs and his executives, two back-up pilots are also kept on the payroll. He is selling the older jet, once owned by Elvis Presley, which is also stored at Hopkins.
Jacobs, his brother, and Visconsi also own a 14-room ranch, “The Chateau,” in Hidden Valley near Thousand Oaks, California, about an hour from downtown Los Angeles. They lease it to production companies for movies and television shows. Episodes of “The A-Team” and “Murder, She Wrote” have
been filmed there. The entire 25-acre estate, complete with croquet court and helipad, is on the market for $5 million.
If the past is any indication, Jacobs should have little trouble selling The Chateau. JVJ has such a good business reputation that most often, deals are sealed with a handshake. “We’ve been doing business with the Jacobs brothers for many years,” says Jerry Jarrett, chairman of AmeriTrust. Jarrett’s bank helped finance the Indians deal. “They have absolute integrity. If they say they’ll do something, they do it. There’s no question they want to improve Cleveland. They’re doing it to help the city.”
It is the swift but silent way Dick Jacobs bought the team that perplexes many Clevelanders accustomed to having such civic arrangements washed in the media. He declined to engage in public debate with team partners who did not want to sell out. He also declined to explain himself to sports reporters after breathless news accounts stressed that the purchase gave him the right to move the team in five years.
Until major-league owners approved the deal, Jacobs refused anything more public than a passing acknowledgment that he and his brother had made an offer. Even today, as Dick Jacobs moves into the national limelight, he does not employ a personal public-relations aide.
Jacobs admits that after so many years of building his business, it was time to take on something different. “Along with JVJ’s regular business, I want to have fun, too,” he says.
Perhaps wanting to have fun has something to do with delayed gratification. The self-made Jacobs brothers were instilled with strong business values by their German-American Methodist parents.
Dick and Dave have no other brothers or sisters. Their father, Vivian, grew up in Grand Rapids, Michigan, and was already helping support his widowed mother by working as a Western Union messenger while in grade school.
V.R., as he was known, graduated from Albion, a Methodist College in central Michigan, at the close of World War I. After serving a year in the Coast Guard, he married his college sweetheart, Adeline Yeiter, a farm girl who had taught in a one-room country school.
In 1919, V.R. found a job in Akron marketing Goodyear’s pioneering lighter-than-air aviation program, including dirigibles. At the start of World
War II, V.R. directed Goodyear’s defense-related sales. He died in 1956 of a brain tumor at 59. Mrs. Jacobs died in 1971.
The Jacobs brothers grew up in Akron. “Our first house in Goodyear Heights was so close to the plant where my father worked that we could smell the rubber burning,” says Dick Jacobs.
Dick established his work ethic in the Depression. By the time he was in the third grade, he was selling window polish door to door. “I learned to qualify customers early,” he says with a chuckle. “Before I caught on to what was happening, I was polishing everyone’s windows by demonstrating how the polish worked. I was using it up.”
Dick moved up to mowing lawns for 25 cents, and by age 12, he was cutting potatoes in Swensen’s, a drive-in restaurant near Fairlawn.
At 14, he was promoted to carhop, at 12 and a half cents an hour. “The average tip was a dime. If you hustled, you could make $20 a night,” he recalls.
During Dick’s last two years at Buchtel High School, the nation’s economic problems forced the school to a split schedule. Dick — his friends called him Jake — finished class at 11:30 a.m., hurried to Swensen’s to work through lunch and dinner, and went home to study. (Another Swensen waiter at the time was Bob Broadbent, now chairman of Higbee’s.)
Dave Jacobs was doing the same thing at a nearby restaurant, Chicken Charlie’s. Dave graduated from Buchtel in 1939 and went on to pilot blimps in the Navy along the Atlantic coast and South America during World War II. His mission was securing U.S. convoys and locating enemy subs.
Dick, who graduated four years later, was voted wittiest male in his senior class. “Dick, Dave, and their parents were four of the funniest people I know,” says Oscar Hunsicker, an Akron attorney who grew up with the Jacobses and still remains close to them. “All you had to do was get them talking, and they could make you laugh with their stories.”
Both Jacobses toss off quick one-liners — even at their own expense.” It doesn’t cost anything to be happy,” says Dick. “It’s all within yourself.”
After graduation from high school, Dick started selling Electrolux vacuum cleaners. “I only sold one,” he allows, “but you learn a lot going door to door. Nothing starts without the sale — even marriage. You must present yourself in an acceptable way.”
At the height of World War II, 18-year-
old Dick Jacobs was deemed acceptable by the U.S. Army and attended officer’s candidate school. As a second lieutenant, he ran a mortar company in the Philippines. After the bombings in Japan, he was shipped to Osaka, where he headed a company of 250 occupational troops. “The service strengthened my discipline,” he says.
Discharged in 1946 as a first lieutenant, Jacobs enrolled at his parents’ alma mater, Albion College. He played basketball one year, pledged Sigma Nu, and was elected fraternity president. He compressed his coursework into three years by taking summer courses at Akron and Kent State.
A B student, he graduated in 1949 in business administration from Indiana University, where he took his final year. “I didn’t want to waste time,” he says. “I wanted a bite out of the apple. I wanted the opportunity to be rewarded according to my efforts.”
In 1952 Jacobs married Helen E. Chaney, a college classmate who grew up in New Jersey. They divorced in 1983, which Jacobs declines to discuss. Of the three Jacobs children, only Jeff lives in Greater Cleveland. Marilyn Jacobs Preyer is married to a businessman in Chapel Hill, North Carolina, and is the mother of a small child. Nancy Jacobs is a secretary in Minneapolis.
With World War II behind him, Dave Jacobs started a career in commercial real-estate sales. After finishing college, Dick followed him. There was no question Dick would pursue sales. He had helped finance his senior year at Indiana by selling hospitalization insurance in the married-students’ trailer park. “I decided against insurance as a career because I wanted to deal in something I could see, something a little more tangible and exciting,” he recalls.
After six months of looking, Jacobs found a job in Akron selling real estate — houses. “The boss said I wasn’t ready for commercial,” he laughs. His first year,
Jacobs went house to house asking owners if they wanted to sell. He made $1,500 that year, $3,000 the next year, and in 1952, after moving up to commercial real estate, he earned $4,500.
Despite the meager return, Jacobs was learning the shopping-center business by assembling packages of land that Youngstown’s Edward DeBartolo, now the largest shopping- center developer in the world, bought for his early strip centers.
“As a young broker, he was very industrious and ambitious,” says DeBartolo.” He got into shopping centers at the right time and took the ball and ran with it. His new downtown project should do well.
“But with the Indians, he must have patience,” continues DeBartolo, who owns a hockey team and whose son, Edward, Jr., owns the San Francisco Forty Niners football team.” Sports is not a regular business.”
Like DeBartolo, Dick Jacobs was quick to realize the extraordinary money potential in the mailing of America. A chance meeting in 1954 provided the opportunity he had been seeking.
That year, Dominic Visconsi, like Dick Jacobs, was not even 30 years old. Yet he was already making his fortune in malls. Visconsi’s father, Tony Visconsi, an Italian immigrant, had boosted himself to one of the first shopping-center developers in America.
Though Tony Visconsi had lost everything during the first years of the Depression, he was developing again before the ‘30s were over — mostly small buildings in what were then the new suburbs, such as Lakewood and Parma, with a grocery store on the ground floor and two apartments above.
Tony’s modest shopping center, opened in 1938 at Euclid and Superior in East Cleveland, was the first to provide abundant off-street parking. “I remember an A&P executive asking why we’d waste space on parking,” recalls Dominic Visconsi. “My father replied, ‘There will soon come a time when you won’t take a store without parking.’ “
By the mid 1950s, the Visconsis had already developed a number of suburban shopping centers, including Eastgate in Mayfield Heights. They were adding on to Southland in Middleburg Heights when Dick Jacobs knocked on the construction trailer there on behalf of a shoe company that wanted to lease shopping-center space.
Visconsi, who had dropped out of Western Reserve University to join his father’s business, asked Jacobs to check on the ownership of land at West 150th and Puritas. Dick returned the next day with the information.
He also asked Visconsi if he and his brother could become partners in the Puritas shopping center with another commercial real-estate broker, Lew Mead, who was in business with Dave Jacobs. Dick moved from Akron to Cleveland and joined their company in 1955 as a salesman.
“There seemed to be an immediate chemistry between Dick and me,” confides Visconsi. “I liked him. I was impressed by his attitude and intelligence, and by his coming back in one day with so much data.”
Within 24 hours of the meeting, the Jacobs brothers, Mead, and Visconsi became partners. In the first eight years of the relationship, they developed small-and medium-sized strip centers.
Their big break came in 1962 when Federated, the giant Cincinnati-based department store chain, asked them to build Northland, the first regional mall in Greater Columbus. “That established us as a major developer,” says Visconsi. Northland, which had a Sears and a Federated-owned Lazarus, was so successful that the Cleveland developers were invited to put up two others in Columbus.
As their business expanded, the Jacobses moved to a small building in Rocky River in 1964, and in 1971, a year after Mead retired from the business, the newly organized JVJ moved into its own building. The company formed a close relationship with the large national department stores, which influence how and where a mail goes up. Sears is JVJ’s primary occupant — in 30 of its malls.
“I met the Jacobses through a Sears vice president who in 1962 told me, ‘These boys have potential to be the best shopping-center developers in the country,’ “ recalls Herb Strawbridge, retired chairman of The Higbee Company, and the man who helped Higbee’s into the Jacobses Midway Mall in Elyria in 1964. “They did a first-class job all the way. They’re tough but fair negotiators. They have a good relationship with all their customers.”
Strawbridge is among many businessmen who have dealt with the Jacobses who say success came because the brothers were true to their word and built quality malls, insisting on top retailers and spending extra for
construction, landscaping, and maintenance. “If a store was not of the quality they wanted, they simply wouldn’t let it in,” Strawbridge says.
“We were in the right industry at the right time,” Dave Jacobs concedes. “But it was one step at a time. And it meant taking risks. There was no one activity that was totally safe. We were obligated to lenders and obligated to produce.”
Produce they did, though some years ago, Dick Jacobs says, he realized one of his few business failures, a chain of stereo stores in which he became a major investor. Poor management contributed to its losing $15 million. Instead of declaring it bankrupt, Jacobs paid off every creditor to the penny.
“I’m from the old school,” he allows. “What you contract for in business, you pay for. It’s that simple.”
That modus operandi helped JVJ capitalize on one of the greatest demographic changes in modern America — the growth and mailing of the suburbs in the 1960s and 1970s. The company grew almost exponentially. Today JVJ not only has separate construction and leasing branches but also in-house architecture, engineering, and legal departments.
“Dick is the hardest worker I’ve ever met,” says 51-year-old Marty Cleary, Dick’s right-hand man, who was lured to the JVJ presidency from Teacher’s Insurance in New York.” His mind is like a dynamo. He never forgets anything.”
To Jacobs, knowledge is power. “Money always follows creative thoughts,” he says. Jacobs expects executives to keep him briefed on major elements of all transactions. “I want no surprises.” Even in his new baseball role, he is constantly asking about everyone — from team owners to reporters. “I’m a street person, in a way. If you didn’t listen to what’s new in my business, you’d be building 1920s-style centers.”
Such street smarts helped him a few years ago when he was approached by a mugger who demanded money. Jacobs bluffed. He reached into his coat pocket, pretending to grip a gun. Then he coolly talked to the man, saying he understood the need for money in these hard times.
Jacobs agreed to leave some cash — a five-dollar bill, as it turned out — at the base of a nearby utility pole if the mugger would pick it up after Jacobs walked away. “I was nervous,” he admits, “but I tried to be calm.”
It has been quick thinking like that, along with discipline, inquisitiveness, and 18-hour workdays that have enabled Jacobs to make his fortune. Nonetheless, he says money is not the primary goal. “You must like what you’re doing. It shouldn’t be work. If it is, you’re in the wrong profession.”
Obviously, Jacobs likes what he is doing. Since most of suburban America is already mailed, JVJ is now buying and expanding malls while moving into downtown retail and office space.
The brothers also enjoy baseball. “When I was growing up, it was the only game available,” says Dave Jacobs. “We played it all we could on the vacant lot near our house.” Dave later served as his high school team equipment manager and statistician. “I was too slow of foot to make the team,” he chuckles.
The brothers had been interested in buying the team for a year. Their interest was heightened by Pat O’Neill’s inability to find the right buyer. The leading candidate, ex-Clevelander David LeFevre, could not locate enough investors, much less clear the legal hurdles to buy out the scores of minority owners. Dave Jacobs himself had declined an invitation to join LeFevre’s investment group.
“Some 30 guys came to me with proposals,” says O’Neill.” Some had wild schemes, including one New Yorker who wanted to lease the team for five years. Incredible. Guys came from Chicago and the West Coast. But none was the kind we were looking for. Some had the money but were not interested in keeping the team in Cleveland. Others were interested in Cleveland but had no money. Some simply did not have the proper temperament.”
O’Neill says that corporate leaders also were pressuring him to sell because of fears the team was doing so poorly that the American League might move it. Nonetheless, he actually took the team
off the market and told Ueberroth he was prepared to run it himself until he found his kind of buyer.
The find came when developer Bill Boykin telephoned him in the spring. “Dick Jacobs asked me to set up a meeting with O’Neill,” says Boykin, who owns three Marriott Hotels with the Jacobses. “He and O’Neill got along quite well. The chemistry was there. When Dick wants to make a deal, he makes it. He’s tenacious. I’m not surprised the deal went through.”
O’Neill says he did not know much about Jacobs, but the small talk at their initial meeting was brief. “He got right to the point. Ts this team for sale?’ he asked bluntly. I had made up my mind to keep it, but my first impression was that Jacobs had the money, forcefulness, and ability to run it. I checked him out. I didn’t get one person critical of him in any way.”
Shortly after their first meeting, Jacobs took an option to buy the O’Neill majority interest in the team. The story broke on television on July 1, the day before Voinovich was to announce it at City Hall.
Though it was not the case, throughout the summer and fall, local sportswriters suggested that since the terms were not final, perhaps the Jacobs brothers did not have the money or did not want to put all their own money into it. “I read very few of the stories,” says Jacobs. “Why let your mind get cluttered with such stuff?”
The financial structuring of the purchase is interesting. The Jacobses put up $18.5 million, borrowed $12 million from five banks led by AmeriTrust, and gave a $3-million note to the O’Neill estate. Jacobs believes that since the team is a civic asset, Cleveland companies also should have a chance to support it. AmeriTrust and Huntington Bank agreed and bought $1.5 million in interest-bearing debentures, which some news accounts wrongly characterized as loans rather than investments.
“Every investor, according to the category of ownership, was treated equally and offered the same prorated figure — whether it was $2,000 or $12 million,” says Gary Bryenton, the Baker & Hostetler lawyer who represented Jacobs in the sale.
One hurdle remained. An American League screening committee in New York was impressed with Jacobs’s presentation in November, but a handful of partners who held a combined ownership that was less than one
percent had discussed filing suit. They simply did not want to give up their holdings in the team, infinitesimal though they were. A lawsuit by fractional investors had held up the sale only a few years before.
Jacobs’s lawyers, though, felt they could overcome any court challenge. “The last holdout called us and agreed just minutes before the owners were ready to vote at their December meeting,” Bryenton says. “Everybody realized the time had come for the torch to pass.”
To guard against anyone’s second thoughts, Baker & Hostetler lawyers in Cleveland waited for Bryenton’s call from the Diplomat Hotel in Hollywood, Florida. As soon as both leagues approved Jacobs, Bryenton phoned Cleveland lawyers. In turn, they hurriedly dispatched waiting messengers to deliver checks to 62 partners. The mission was accomplished between four and five p.m. that day.
Ironically, that afternoon, Jacobs received support from another major-league baseball owner who comes from Cleveland’s West Side suburbs — George M. Steinbrenner III.
When he lived in Bay Village 15 years ago, Steinbrenner and his wife, socialized with Dave and Barbara Jacobs. Although Steinbrenner was unsuccessful in his effort years ago to buy the Indians from Vernon Stouffer, he exercised his influence to quiet two other owners who were forcefully questioning Jacobs.
“I shut them up,” he says. “I said, ‘Hey, these are the kinds of guys we’ve been looking for in Cleveland for 15 years.’ I made the motion, and the vote was quickly taken.. .now I only hope he goes easy on us.”
Of course, he does not mean that. No, indeed. George Steinbrenner is one of the most competitive men since Attila the Hun.
So Dick Jacobs’s facing off against Steinbrenner should mean a return to the exciting days when the Yankees and the Indians battled for dominance of the American League.
“Don’t expect me to pick up on that,” says Jacobs. “The competition is on the field. Not in the media.”
But why are you smiling, Mr. Jacobs?
Senior Editor Edward P. Whelan spent two months interviewing the Jacobs brothers and a wide range of their associates in preparing this article.